What business leaders can do to prepare for the next normal

How do you prepare your organization when you’re operating in a time of profound uncertainty and an accelerating speed of change?

COVID-19 and its impact have thrust this question into the limelight. Executives and owners have had to reassess plans, update annual budgets, and in some instances embark on new business models almost overnight.

We recently asked some of our firm partners what organizations can do to prepare. Here are five critical considerations as leaders look toward the next normal.

Start at the Beginning

The speed at which the pandemic impacted businesses exposed gaping holes and issues for many organizations. For some, it was in their supply chain. For others, it was succession plans, or lack thereof.

“Organizations must remedy the vulnerabilities the virus exposed,” says Partner Joe Kristan. “You have to look across your entire organization. It may be in your capital structure—too much debt can make you fragile. It may be in your systems, especially if you weren’t adequately prepared for a remote workforce.”

Leaders can start this process by taking a holistic look at their organization. “Focusing on your core competencies, eliminating product lines or services that distract from your core business objectives and providing superior customer service will keep businesses viable during the slow down and allow for a quicker recovery,” says Partner Shelley Earsley.

Business leaders will have to be far more involved for the foreseeable future. “The depth and complexity of the changes businesses and industries are facing are incredible,” says Ross Manson, Chief Practice Officer. “A high-touch approach is going to be required by leaders.”

What can you do? Begin with your financials. “Because this downturn could have a longer duration, liquidity should be top priority for businesses,” says Partner-in-Charge of Business Valuation, Chad Flanagan.

Make sure you:

• Conduct financial modeling to understand how various scenarios impact cash flow and liquidity

• Manage your assets on the balance sheet

• Increase your turn on inventory and accounts receivable

Learn more here.

Embrace New Technologies

The digital revolution has impacted the way we do business. A recent HLB survey on how global executives prepared for a new decade found that 57% of business leaders trust technological advancements will help overcome future international challenges.

Strengthening digital capabilities will be a key component of future growth and innovation for leaders. This has never been clearer than now. Organizations have had to embrace digital transformation almost overnight as physical office spaces and store fronts closed.

“In the last two decades, organizations that have separated themselves are the ones who have committed and embraced digital business,” says Manson. “Given the current state, digitization of business becomes an even bigger separator than in the past.”

COVID-19 has placed already fast-growing technology like artificial intelligence and machine learning at the forefront of future business models. There has been a 13% increase in the average utilization of brain powered robots in retail locations since January 2020.

Further, technology will impact the next normal and the rise of the touchless environment. In fact, a recent study found that 37% of consumers prefer to stay indoors while meeting needs such as working, making purchases and virtually socializing. Organizations must consider a touchless or minimal contact environment in their reopening plans.

What can you do? Ask yourself the following question:  “HOW or WHAT can I digitize?”

Understand Your Data

With sudden digital transformation comes more data than we’ve ever had before. Understanding and harnessing that data will be critical for businesses who wish to make strategic growth decisions.

“There will be a more rapid shift for businesses to utilize technology to solve business problems, meet customer demands, efficiently utilize employees, analyze real-time data and adjust quickly to changing conditions,” says Earsley.

The future of business is based on the ability to make informed business decisions in real time and based on accurate data. This means relying on far more than just your financial statement. Business leaders should embrace leading indicators like operational analytics to get a clear snapshot of their organization’s current state and where they’re headed.

What can you do? Take a deep look into how operational analytics can help you reposition your organization. How to Use Operational Analytics to Lead During a Downturn

Readiness to Adapt

Even prior to the COVID-19 pandemic, over half of business leaders felt economic uncertainty was a top risk to their organization. But successful business leaders look for opportunity within a turbulent business climate. In order to do this, many business leaders must search for ways to enhance business acumen, understand their customer landscape and even invest in new business models.

It all starts with innovation. “You can’t always use the past to predict the future,” says Partner Laura Srsich. “We now know that anything can happen to disrupt business. Thinking way outside the box for preparedness will become an integral part of all businesses, from planning to budgeting.”

When it comes to new business models, leader should develop three to four business models that outline various plans for success. By developing multiple scenarios, it encourages a more deliberate path forward, eliminating the tendency to choose the middle path.

“Defining a range of business models allows the organization to be intentional and focused in their response to changing economic conditions,” says Earsley.

Truly resilient businesses will be those who focus on staying relevant. They will take a deep look at what they offer, from product to consumer experience, and take the necessary steps to enact change.

“All business leaders should start thinking like a start-up company,” says Manson.

“Companies have to stop doing things just because they’ve always done it that way,” says Flanagan. “Now is the time to revisit short- and long-term strategy. How can you use digital solutions, new markets or products and emerging technology to move forward?”